Ministry Drafts Safeguards Law to Protect Domestic Producers

The Deputy Minister of Industry and Commerce has stressed the need to carefully word a proposed law that will protect domestic producers against an influx of imported goods.

Mr Somchit Inthamith made the remarks during a one-day ‘Safeguards Law’ meeting organised by the Ministry of Industry and Commerce together with the United States Agency for International Development (USAID).

The meeting discussed a draft law on the protection of domestic goods producers from imported products, to allow government officials and various sectors to share ideas before presenting the law to the National Assembly in April.

“The main objective of this meeting is for ministries and the relevant bodies in Vientiane to edit, improve and provide input for the draft which our officials will complete and present to the National Assembly next year,” Mr Somchit said.

Chief of Party of the USAID LUNA II project, Mr Daniel Fitzpatrick, welcomed attendees to the consultation session on the draft Safeguards Law.

LUNA II is funded by the United States government and was established by a Memorandum of Understanding between USAID and the Ministry of Industry and Commerce to promote trade and investment in Laos, primarily by helping the country to meet its commitments under various trade arrangements, such as the WTO and the AEC.

“While increasing trade and facilitating commerce is our immediate task, our ultimate goal is to create more jobs and help raise the living standards of the Lao people. Today we have gathered to discuss the draft Law on Safeguards, which has been prepared by the Ministry of Industry and Commerce over the past several months,” Mr Fitzpatrick said.

The law is an exception to the overall principle that tariffs need to be kept within a range promised by a country when it joined the WTO. The agreement specifies that the safeguards can be imposed only if the increase in imports was unforeseen.

“This means the drafters have had to carefully figure out how to make the law work in the Lao context while having it comply with the international Safeguards Agreement. This is really important because if the law conflicts with the Safeguards Agreement, Laos will find itself in an uncomfortable position when it submits the law to the WTO for consultation. So, as you discuss the draft today, I urge you to remind yourselves that safeguards are an exception to the WTO’s policies of free trade, on e that should be rarely used and one that will attract attention if used incorrectly. Still, it has its place in protecting industries in countries such as Laos under the proper conditions,” Mr Fitzpatrick said.

The meeting elicited ideas and insights from participants into the draft, with most of the discussion aimed at improving the wording to better protect domestic producers.